Centre, K'taka scurry to protect investor sentiment after iPhone facility trouble

The recent violence at Wistron Corp factory in Kolar, Karnataka, which manufactures iPhones for Apple Inc, has cast a shadow on foreign investments in the state. The Centre and the Yediyurappa government are on a damage-control mission as they scurry to protect investor sentiment.

On December 12, workers at the Kolar facility of the Thailand-headquartered Wistron Corp went on a rampage over delays in wage payment. Some ransacked the plant facilities and resorted to looting of company properties, according to company officials. Wistron manufactures iPhone SE 2020 and other older generation phones at the plant, located about 70 km from Bengaluru.

Watch: What’s causing labour unrest in business-friendly K’taka?

A first information report (FIR) was registered in connection with the incident and 7,000 people were booked, including 5,000 unidentified workers.

Chief Minister BS Yediyurappa told reporters that Prime Minister Narendra Modi has expressed concern over the violence and asked the state government to not let such incidents recur in future.

Yediyurappa said the state has offered full support to the Taiwanese-headquartered company to resume operations at the earliest. It may take another two weeks for the company to restart production, said Labour Minister Shivaram Hebbar. The government action comes amid the Centre pulling up the state for neglecting workers’ unrest and delaying its response. The Department of Promotion of Industry and Internal Trade and the Commerce Ministry asked the state to submit a report in quick time.

Watch: iPhone unit vandalised near Bengaluru; 80 held

The CM assured that the state was taking measures to contain such incidents in future and it is fully committed to punishing those involved in the violence. The state government condemned the violence and has arrested close to 160 people so far.

Meanwhile, labour and trade unions slammed the Karnataka government for failing to take action against the company for alleged violations and targeting contract workers instead. They alleged that the government favoured companies because they bring in foreign investment and boost jobs, but ignores labour law violations.

The All India Trade Union Congress (AITUC) argued that while the workers were assured a salary of Rs 22,000, the company paid much less despite them working overtime. The union said the incident was a direct result of the exploitative, illegal practices on part of the employer.

Meanwhile, six staffing firms that supplied manpower to Wistron may face fines and could face blacklisting for failing to pay wages to the workers on time. The company employed close to 1300 permanent employees and about 8,400 contractual workers, recruited through various firms.

The Union government brought sweeping changes to three labour laws earlier this year (on social security, industrial relations and occupational safety). It merged 29 central laws into four broad labour codes, giving an upper hand to employers.

The Wistron Corporation could see a 8-9 percent loss in production in India for December according to a note by Counterpoint Research. Losses for Apple, however, would be negligible, the analyst noted.

Labour Minister Shivaram Hebbar declined to comment on the alleged labour law violations by Wistron or the recruiting firms engaged by the company. He said the inquiry report was still not complete and hence it would not be prudent to comment on it.

“We are waiting for the inquiry report, which will be ready soon. We are in talks with all the stakeholders and we shall take action depending on the findings of the report,” Hebbar told ‘The Federal’.